You might think choosing a contractor
and creating a renovation plan are the two most important
considerations when it comes to planning a home improvement
project. But if you have not considered your insurance
needs, and made sure your property is adequately covered
during the renovation process, you may be putting your
investment in serious risk.
The time to contact
your homeowners-insurance agent is before you begin
to make sure your agent's there with you every step
of the way," says Madelyn Flannagan, vice president
of education and research for the Independent Insurance
Agents & Brokers of America.
Your insurance agent can help you evaluate
your needs and also help you make certain the contractors
you use have enough insurance, including workers' compensation
and general liability insurance, to cover any problems
that may arise during the project. If the contractor
damages your home during the job, his insurance policy
will most likely kick in. But you don't want to leave
that to chance. Not only should you double-check with
the contractor's insurance company to make sure his
policy is up-to-date, but you should let your homeowners-insurance
agent look at the contractor's certificate of insurance.
"You want to make sure there's no
misunderstanding about whose policy kicks in where,"
says Flannagan. "Talk to your agent to determine
if there are any holes or gaps in the coverage that
you need to be aware of."
Preparing for vacancy
If you leave your home while renovations are being done,
you may be violating your current homeowners policy.
Many policies have vacancy clauses, which state that
you can't be away from your home for longer than a set
period of time, such as 30 days or 60 days. In the event
that you will be staying outside your home for a longer
period of time while contractors are working, you will
need to buy additional insurance coverage for that period
Another factor that can affect the amount
of coverage you need is whether your home will be exposed
to outside elements. For example, if your roof is raised
or a contractor will be replacing doors and windows,
your home may be exposed to bad weather or even burglars
who could get inside and steal some of your belongings.
"A lot of people take their roof
off and expose their home to the elements," says
Flannagan. "It's really not a typical home anymore
during that time. So you just need to make sure that
during the time that your home is open to the elements
or being worked on that you have the right insurance
policy in effect."
Builder's risk policies can be purchased
to add additional coverage. Sometimes a contractor will
purchase this policy, but if not, you can take one out
yourself. Such policies protect furniture and equipment
that has yet to be installed, so if you have uninstalled
carpet or appliances lying around on the premises, the
builder's risk policy gives you extra protection.
Posted: April 12, 2006